It was a reinsurer for the two closed annuity businesses, collecting a premium in return for assuming the risk of the difference between the minimum benefit and the portfolio value. There have been no new policies written since 2000 and the business has been in run-off since then.

Some of the top producers of variable annuities have either exited the business or said they would scale back sales, given the risks involved. In a persistently low interest rate environment like the one life insurers have faced in the last few years, the guaranteed benefits on some kinds of variable annuities become harder to guarantee.

Berkshire will receive $1.8 billion in assets related to the businesses and another $400 million, including $100 million in cash and $300 million funded from a tax benefit Cigna will receive.

The assets, which according to Fitch Ratings include both public and private bonds as well as commercial mortgages, support the guaranteed minimum death benefit annuities and guaranteed minimum income annuities.

Fitch said there were no changes to its credit ratings for Cigna because of the deal.

Cigna said it will take an after-tax charge of $500 million in its first-quarter earnings to cover the gap between the payment to Berkshire and its recorded reserves. It is to report fourth-quarter results on February 7.

While it affects Cigna's net earnings, the company said the charge will not change its earnings per share excluding items, the number that Wall Street tracks.

The reinsurance deal is not unusual for Berkshire, which has done a number of transactions over the years with insurers seeking to rid themselves of a particular book of business.

In April 2011, Berkshire struck a $1.65 billion deal with AIG (AIG.N) to take on that insurer's U.S.-based asbestos risk. It did a similar deal with CNA Financial Corp (CNA.N) in 2010 and with a Lloyd's of London LOL.UL affiliate in 2006.

For Buffett, the deal is a bet that he can make more money on the upfront fee plus the investment assets than Berkshire will have to pay out over time in policyholder claims.